AT&T (Dallas, USA) said a shortage of the latest iPhone, which went on sale in the last week of the quarter, meant that the vast majority of third-quarter iPhone sales went to existing customers, stunting its growth of new customers.

Slow customer growth likely helped the company post better-than-expected earnings for the quarter as new customers come with a hefty cost for wireless service providers.

AT&T's profit rose to $3.64 billion, or 63 cents per share, from $3.62 billion, or 61 cents per share, and was 3 cents ahead of Wall Street expectations, according to Thomson Reuters I/B/E/S.

However, revenue fell to $31.46 billion from $31.48 billion and missed the analysts' average estimate of $31.59 billion, according to Thomson Reuters I/B/E/S.

The company also raised its target for 2012 free cash flow by $2 billion to $18 billion.

Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc (Newbury, UK).